Education Reforms Key to Boost Innovation, Competitiveness, and Labor Productivity in Emerging Europe and Central Asia

October 24, 2011

Eschborn, October 24, 2011 - Countries in Emerging Europe and Central Asia need to reform their education and training systems in order to provide the right skills demanded by labor markets, says a new World Bank report, Skills, Not Just Diplomas: Managing Education for Results in Eastern Europe and Central Asia. The report will be released on October 25th in Eschborn, Germany, at the 6th World Bank Europe and Central Asia Education Conference. Having skilled workers boosts innovation, competitiveness, labor productivity, and earnings, which are key to ignite and sustain inclusive economic growth in the region.

"Closing the skills gaps in the region requires a fundamental change of approach so that education and training systems refocus their attention from schooling inputs to learning outcomes for the vast majority of students," said Mamta Murthi, World Bank Director, Human Development Department, Europe and Central Asia. "In spite of the large number of students completing upper secondary and tertiary education, surveys of around 10,000 firms in the region reveal that skills shortage is one of the most significant bottlenecks to business growth. This report addresses this paradox and the policies that can help meet the demands of constantly evolving labor markets."

Three factors jeopardize the quality and relevance of education systems. First, there is too little focus on measuring skills - the ultimate outcomes of the education and training process. Second, schools and local authorities often lack flexibility and freedom to respond to rapidly evolving needs and the local context due to still pervasive centralized management in many countries. Third, countries have struggled to reorganize their school networks in the face of shrinking student cohorts, resulting in misallocation of scarce resources - for example in maintenance of nearly empty schools rather than in restoring the attractiveness of the teaching profession.

"Without adequate information on the skills students acquire and those adults actually have, policies to address skills gaps operate in the dark," said Lars Sondergaard, Senior Economist, and lead author of the report. "The latest 2009 PISA assessments, measuring the 15 year olds' mastery of reading, science and mathematics in 19 Emerging Europe and Central Asian countries brought sobering news - a large proportion of students across the region have a low mastery of reading and lack basic problem-solving skills, which do not measure up to the demands of a global, more competitive economy. We lack data on the skills of the working-age population."

The Skills, Not Just Diplomas report analyzes the challenges and opportunities to prepare education and training systems to address this situation, building on cutting-edge policies and successful international experience. The report recommends focusing reform efforts in three main areas:

  • ‘Turn the lights on’ - focus more on measuring the skills students and adults have. To improve the quality and relevance of education, some large knowledge gaps need to be filled. For instance, what skills - both, problem-solving, technical and behavioral skills - are students lacking? New surveys are needed to measure the skills of youth and the adult population, and assess what skills firms are looking for. With knowledge on what the gaps are, policies can be designed, for instance, to improve curriculum, teacher training, and career choice.
  • Enable adaptation - give more flexibility to schools and local authorities. In order to keep up with rapidly evolving labor markets,  decision making on how best to organize the instruction process to produce the right skills needs to move from centralized ministries of education  to local authorities and schools. They are more attuned to students' needs and to local context, and thus need more freedom and flexibility to manage budgets, influence courses offered, and select and manage their staff.
  • Spend smarter - address sector inefficiencies. Policymakers can tap budgetary savings by addressing significant inefficiencies in the sector - such as oversized school networks - to restore the attractiveness of the teaching profession, expand early childhood and adult education and training, and measure learning outcomes to systematically inform policy design.

The findings and recommendations of the report are intended to contribute to national debates on the reforms to education and training systems to make them serve the needs of inclusive growth strategies of countries across the region.

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